Restructuring and reorganisations can be required for a range of reasons from internal group restructuring due to operational reasons to restructuring brought about due to financial difficulties and the inability of a company to meet its obligations to the providers of company debt.
Inter group reorganisations
City Valuation Advisory provides valuation assistance to clients contemplating an inter group reorganisation and provide valuation opinions to provide support for the value of companies or shareholdings being transferred within the group.
The valuation basis applied will typically be market value and the deliverable will usually be in the form of a report.
A typical report will include:
- Basis for the valuation and assumptions;
- Key factors which in our and/or management’s opinion impact the valuation of the business;
- Details of the valuation methods applied which will typically be discounted cash flow and earnings multiple based methods;
- Benchmark data for the discount rate and earnings multiples based on comparable quoted companies and comparable transactions;
- Valuation calculations based on each valuation methodology applied; and
- Opinion on the value of the business or asset based on the above.
- The deliverable provides information on value and is not due diligence or any form of verification. It will not provide a view as to whether or not the reorganisation or restructuring should be made; such decisions always resting solely with the client.
Valuations and restructuring due to financial distress
City Valuation Advisory provides valuation analysis to management and shareholders of a company facing financial difficulties and to banks whose clients may have debt repayment or breach of covenants problems.
A typical valuation engagement will look at the key factors impacting value and provide an opinion based on the information provided on the value of the company and how this compares to the levels of debt and equity. This can be useful in helping management prepare for discussions with its debt providers and to banks in determining its strategy for dealing with matters such a covenant breach.